Lesson 1Tax assumptions: corporate tax, VAT treatment, withholding, tax holiday and loss carryforward rulesThis section establishes tax assumptions for corporate income tax, VAT, withholding taxes, tax holidays, and loss carryforwards, demonstrating their impact on project cash flows, equity returns, and lender requirements in Botswana.
Corporate income tax base and ratesVAT on capex and operating costsWithholding tax on interest and dividendsTax holidays and incentive regimesLoss carryforward and minimum tax rulesLesson 2Debt financing assumptions: tenor, interest rate indexing, margin, grace period, amortization profileThis section defines debt assumptions like tenor, interest rate base, margins, fees, grace periods, and repayment profile, showing their effects on DSCR, LLCR, and equity returns in Botswana project models.
Debt sizing approach and leverage limitsInterest rate base, margins, and feesGrace periods and sculpted amortizationCash sweep and prepayment mechanicsRefinancing and repricing scenariosLesson 3Construction schedule and milestones: mobilization, EPC durations, commissioningThis section sets the construction timeline from start notice to completion and operation, modelling milestones, progress curves, and phased capex and interest during build for Botswana solar plants.
Key EPC milestones and definitionsTime-phased capex and S-curve profilesLinking schedule to IDC calculationsMilestone payments and retentionCOD tests and delay scenariosLesson 4Inflation, discount rate selection (WACC), and real vs nominal modelling conventionsThis section covers modelling inflation, choosing nominal or real discount rates, and applying WACC consistently, keeping valuation, tariffs, and debt metrics aligned in Botswana project timelines.
Building inflation index curvesReal vs nominal cash flow conventionsDeriving pre-tax and post-tax WACCCountry risk and risk-free rate inputsInflation pass-through in tariffsLesson 5Defining plant technical assumptions: nameplate, losses, degradation, and availabilityThis section defines key technical parameters for a 50 MW solar PV plant, covering DC and AC capacity, system losses, degradation, and availability for accurate energy yield in Botswana conditions.
DC and AC nameplate sizing choicesSystem loss categories and benchmarksModule and inverter degradation curvesScheduled and forced outage assumptionsNet capacity and net output definitionLesson 6Equity structure and timing: sponsor equity, bridge loans, reserves and DSRA sizingThis section outlines equity structure and timing, including sponsor equity, bridge loans, reserves, and DSRA sizing, explaining interactions with debt draws and distributions in Botswana financing.
Sponsor equity commitments and tranchesEquity bridge loans and repaymentFunding waterfall and drawdown timingDSRA sizing methods and fundingMaintenance and other reserve accountsLesson 7Capital expenditure breakdown: PV modules, inverters, mounting, civil, grid connection, contingenciesThis section details EPC and owner’s costs into categories like modules, inverters, mounting, civil works, grid connection, soft costs, and contingencies, structuring them for Botswana models.
PV modules and inverter cost assumptionsMounting structures and tracker costsCivil works and balance of plant itemsGrid connection and substation costsDevelopment fees and owner’s costsContingency and price escalation setupLesson 8Operating cost assumptions: fixed O&M, variable O&M, insurance, land lease, and escalationThis section sets operating costs including fixed and variable O&M, insurance, land lease, and recurring expenses, modelling adjustments, changes, and performance fees for Botswana operations.
Fixed O&M scope and cost driversVariable O&M and performance feesInsurance coverage and premium settingLand lease and right-of-way costsIndexation formulas and step changesLesson 9Project life, asset depreciation methods, residual value assumptionsThis section defines project life, depreciation methods, and residual value, showing interactions of technical life, PPA term, and accounting rules on taxes, valuation, and refinancing in Botswana.
Technical life vs PPA and debt tenorTax and accounting depreciation methodsComponent replacement and major overhaulsResidual value and terminal cash flowsImpact on tax shield and valuationLesson 10Capacity factor calculation: axis tilt, tracking, and irradiance inputsThis section demonstrates calculating capacity factor using sunlight data, tilt, tracking, and losses, translating profiles into annual net generation for Botswana solar sites.
Solar resource data sources and qualityFixed tilt and azimuth optimisationSingle-axis and dual-axis tracking gainsLosses from shading, soiling, and clippingConverting irradiance to net generation
